China and HK stocks fall as investors await China GDP data

SHANGHAI: China and Hong Kong stocks fell on Tuesday as investors exercised caution ahead of the release of China’s annual economic growth data on Wednesday.

China stocks slip after central bank keeps medium-term rate unchanged

• China’s blue-chip CSI300 Index dropped 0.4% by the lunch break, while the Shanghai Composite Index lost 0.6%. Hong Kong’s benchmark Hang Seng Index was down 1.9%, hitting the lowest level since November 2022.

• Unlike the US stock market, China’s stock market has a high dispersion among individual stock performances, Herald Van Der Linde, head of Asia Pacific equity strategy at HSBC, said at a media briefing on Monday.

• “So, the strategy I think is the best to adopt is to go deep and look for individual companies that have growth that is structural and not sensitive to what happens either in the broad economy or the broad market,” he said.

• Meanwhile, investors are awaiting China’s 2023 full-year gross domestic product (GDP) figures on Wednesday to see whether the country beats its around 5% economic growth target for last year.

• December activity data scheduled to be released at the same time is also in focus to see if the economy gained momentum heading into 2024.

• Chinese transportation stocks hit a one-month high on Tuesday, rising for a fourth session in a row as investors bet the escalating Red Sea crisis will push up crude freight prices, generating windfall profit for oil tankers and shipping companies.

• Although oil tankers including Nanjing Tanker Corp , COSCO Shipping Energy Transportation Co and China Merchants Energy Shipping Co corrected on profit-taking after a rally, brokerages say they’re still worth buying.

• “Geopolitical tensions are pushing up risk premiums for shipping assets,” Hua Chuang Securities said in a report.

• “The lingering Red See crisis is bringing overall investment opportunities in shipping stocks as freight price may trend up higher.”

• Tourism stocks have been one of the few bright spots among Chinese equities, rising 1.5%. Changbai Mountain Tourism rallied 10%.

• In Hong Kong, tech shares slumped 2.3%.